##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549-1004


FORM 10-Q

|       |  |                                                                                          
|------ |  | -----------------------------------------------------------------------------------------
|[X]    |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	 SECURITIES EXCHANGE ACT OF 1934
|      
|       |  | For the quarterly period ended September 30, 1999                                        
|       |  | OR                                                                                       
|      
|[    ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
	THE SECURITIES EXCHANGE ACT OF 1934

For
 the transition period from  to

Commission file No. 1-14787

DELPHI AUTOMOTIVE SYSTEMS CORPORATION

(Exact name of registrant as specified in its
charter)


|                                                                |  |                                         
|--------------------------------------------------------------- |  | ----------------------------------------
|                                                               
|                                                               
|                                                               
|                                                               
|Delaware                                                        |  | 38-3430473                              
|(State or other jurisdiction of incorporation
	or organization) |  | (I.R.S. employer
	identification number)
|                                                               
|                                                               
|                                                               
|                                                               
|                                                               
|5725 Delphi Drive, Troy, Michigan                               |  | 48098                                   
|(Address of principal executive offices)                        |  | (Zip code)                              

Registrants telephone number, including area code (248) 813-2000

Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d)
 of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject
 to such filing requirements for the past 90 days.  
Yes X     No

As of September 30, 1999, 561 million shares of the
issuers $0.01 par value common stock were outstanding.





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TABLE OF CONTENTS



|                                                                                              |  |  |  |  |  |  |  | 
|--------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|DELPHI AUTOMOTIVE SYSTEMS CORPORATION                                                        
|PART I. FINANCIAL INFORMATION                                                                
|ITEM 1. FINANCIAL STATEMENTS                                                                 
|DELPHI AUTOMOTIVE SYSTEMS CORPORATION                                                        
|CONSOLIDATED STATEMENTS OF INCOME (Unaudited)                                                
|DELPHI AUTOMOTIVE SYSTEMS CORPORATION                                                        
|CONSOLIDATED BALANCE SHEETS                                                                  
|DELPHI AUTOMOTIVE SYSTEMS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)      
|DELPHI AUTOMOTIVE SYSTEMS CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 
|ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|PART II. OTHER INFORMATION                                                                   
|SIGNATURE                                                                                    



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DELPHI AUTOMOTIVE SYSTEMS CORPORATION


INDEX

|                                                                 |                                                                                                |                                                                                                                |     |    |   | 
|---------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------- | --- | -- | - | 
|                                                                 |                                                                                                | Page No.                                                                                                      
|                                                                 |                                                                                                |                                                                                                               
|Part I  Financial Information                                   |                                                                                                |                                                                                                                |     |   
|                                                                 | Item 1. Financial Statements                                                                   |                                                                                                                |     |    |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 |                                                                                                | Consolidated Statements of Income (Unaudited) for the three and
	nine months ended September 30, 1999 and 1998 |     |    | 3 | 
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 |                                                                                                | Consolidated Balance Sheets at September 30, 1999
	(Unaudited) and December 31, 1998                           |     |    | 4 | 
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 |                                                                                                | Consolidated Statements of Cash Flows (Unaudited) for the nine
	months ended September 30, 1999 and 1998       |     |    | 5 | 
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 |                                                                                                | Notes to Consolidated Financial Statements (Unaudited)                                                         |     |    | 6 | 
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Item 2. Managements Discussion and Analysis of
	Financial Condition and Results of Operations |                                                                                                                |     | 14 |  
|                                                                
|Part II  Other Information                                      |                                                                                                |                                                                                                                |     |   
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Item 1. Legal Proceedings                                                                      |                                                                                                                |     | 21 |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Item 5. Other Information                                                                      |                                                                                                                |     | 21 |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                 | Item 6. Exhibits and Reports on Form 8-K                                                       |                                                                                                                |     | 21 |  
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                
|Signature                                                        |                                                                                                |                                                                                                                | 22  |   
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                
|Exhibit 27   Financial Data Schedule (for SEC
	information only) |                                                                                                |                                                                                                                | n/a |   
|                                                                
|                                                                
|                                                                
|                                                                
|                                                                
|Exhibit 99   Press release dated October 13,
	1999               |                                                                                                |                                                                                                                | n/a |   

2



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##### Table of Contents










PART I.  FINANCIAL INFORMATION







ITEM 1.  FINANCIAL STATEMENTS







DELPHI AUTOMOTIVE SYSTEMS CORPORATION







CONSOLIDATED STATEMENTS OF INCOME (Unaudited)


|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |        |        | 
|---------------------------------- | ------------------------------------------- | --------------------------------------- | --- | ----------------- | ----- | ---- | ---- | ----- | ----- | - | ----- | ------ | ------ | - | ---- | ------ | ------ | 
|                                   |                                             |                                         |     |                  
|                                   |                                             | Three Months Ended                      |     | Nine Months Ended
|                                   |                                             | September 30,                           |     | September 30,    
|                                   |                                             |                                         |     |                  
|                                   |                                             | 1999                                    |     | 1998              |       | 1999 |      | 1998 
|                                   |                                             |                                         |     |                   |       |      |      |      
|                                   |                                             |                                        
|                                   |                                             | (in millions, except per share amounts)
|                                  
|                                  
|                                  
|                                  
|Net sales:                         |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|                                  
|                                  
|                                  
|                                  
|                                   | General Motors                              |                                         | $   | 5,102             |       |      | $    | 4,641 |       |   | $     | 16,941 |        |   | $    | 16,195 |       
|                                  
|                                  
|                                  
|                                  
|                                   | Other customers                             |                                         |     | 1,688             |       |      |      | 1,374 |       |   |       | 5,001  |        |   |      | 4,484  |       
|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|                                   |                                             | Total net sales                         |     |                   | 6,790 |      |      |       | 6,015 |   |       |        | 21,942 |   |      |        | 20,679 | 
|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|Less operating expenses:           |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|                                  
|                                  
|                                  
|                                  
|                                   | Cost of sales, excluding items listed below |                                         |     | 5,980             |       |      |      | 6,151 |       |   |       | 18,824 |        |   |      | 19,220 |       
|                                  
|                                  
|                                  
|                                  
|                                   | Selling, general and administrative         |                                         |     | 402               |       |      |      | 345   |       |   |       | 1,180  |        |   |      | 1,012  |       
|                                  
|                                  
|                                  
|                                  
|                                   | Depreciation and amortization               |                                         |     | 202               |       |      |      | 248   |       |   |       | 646    |        |   |      | 731    |       
|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|                                   |                                             | Total operating expenses                |     |                   | 6,584 |      |      |       | 6,744 |   |       |        | 20,650 |   |      |        | 20,963 | 
|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|Operating income (loss)            |                                             |                                         | 206 |                   |       |      | (729 | )     |       |   | 1,292 |        |        |   | (284 | )     
|                                  
|                                  
|                                  
|                                  
|Less interest expense              |                                             |                                         | 34  |                   |       |      | 68   |       |       |   | 94    |        |        |   | 199  |       
|                                  
|                                  
|                                  
|                                  
|Other income (expense), net        |                                             |                                         | 48  |                   |       |      | (10  | )     |       |   | 115   |        |        |   | 124  |       
|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|Income (loss) before income taxes  |                                             |                                         | 220 |                   |       |      | (807 | )     |       |   | 1,313 |        |        |   | (359 | )     
|                                  
|                                  
|                                  
|                                  
|Income tax expense (benefit)       |                                             |                                         | 84  |                   |       |      | (307 | )     |       |   | 499   |        |        |   | (178 | )     
|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|Net income (loss)                  |                                             | $                                       | 136 |                   |       | $    | (500 | )     |       | $ | 814   |        |        | $ | (181 | )     
|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|Earnings (loss) per share (Note 2) |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       
|                                  
|                                  
|                                  
|                                  
|                                   | Basic and diluted                           |                                         | $   | 0.24              |       |      | $    | (1.08 | )     |   | $     | 1.48   |        |   | $    | (0.39  | )     
|                                   |                                             |                                         |     |                   |       |      |      |       |       |   |       |        |        |   |      |       

See notes to consolidated financial statements.

3



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##### Table of Contents








DELPHI AUTOMOTIVE SYSTEMS CORPORATION







CONSOLIDATED BALANCE SHEETS


|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |       |       |        | 
|------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------- | --------------- | ------------------------------------ | ------------ | ----- | ------ | ------ | ----- | ----- | ------ | 
|                                                       |                                                                                                                           | September 30,   |                                      |             
|                                                       |                                                                                                                           | 1999            |                                      | December 31,
|                                                       |                                                                                                                           | (Unaudited)     |                                      | 1998        
|                                                       |                                                                                                                           |                 |                                      |             
|                                                       |                                                                                                                           |                
|                                                       |                                                                                                                           | (in millions)  
|                                                      
|                                                      
|                                                      
|                                                      
|ASSETS                                                 |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                      
|                                                      
|                                                      
|                                                      
|Current assets:                                        |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Cash and cash equivalents                                                                                                 |                 | $                                    | 1,217        |       |        | $      | 995   |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Other marketable securities                                                                                               |                 |                                      | 41           |       |        |        | 5     |      
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                       |                                                                                                                           |                 | Total cash and marketable securities |              |       | 1,258  |        |       |       | 1,000  | 
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Accounts receivable, net:                                                                                                 |                 |                                      |              |       |        |        |       |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                                                                           | General Motors  |                                      |              | 4,258 |        |        |       | 2,236 |       
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                                                                           | Other customers |                                      |              | 1,505 |        |        |       | 977   |       
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Inventories, net (Note 3)                                                                                                 |                 |                                      | 1,601        |       |        |        | 1,770 |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Deferred income taxes                                                                                                     |                 |                                      | 263          |       |        |        | 285   |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Prepaid expenses and other assets                                                                                         |                 |                                      | 59           |       |        |        | 137   |      
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                       |                                                                                                                           |                 | Total current assets                 |              |       | 8,944  |        |       |       | 6,405  | 
|                                                      
|                                                      
|                                                      
|                                                      
|Property, net                                          |                                                                                                                           |                 | 4,998                                |              |       |        | 4,965  |      
|                                                      
|                                                      
|                                                      
|                                                      
|Deferred income taxes                                  |                                                                                                                           |                 | 2,811                                |              |       |        | 2,813  |      
|                                                      
|                                                      
|                                                      
|                                                      
|Other assets                                           |                                                                                                                           |                 | 1,491                                |              |       |        | 1,323  |      
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                       |                                                                                                                           |                 | Total assets                         |              | $     | 18,244 |        |       | $     | 15,506 | 
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                      
|LIABILITIES AND STOCKHOLDERS EQUITY                   |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                      
|                                                      
|                                                      
|                                                      
|Current liabilities:                                   |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Notes payable and current portion of long-term debt (Note 4)                                                              |                 | $                                    | 119          |       |        | $      | 359   |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Accounts payable                                                                                                          |                 |                                      | 2,908        |       |        |        | 2,260 |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Accrued liabilities                                                                                                       |                 |                                      | 1,737        |       |        |        | 1,438 |      
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                       |                                                                                                                           |                 | Total current liabilities            |              |       | 4,764  |        |       |       | 4,057  | 
|Long-term debt, including intracompany note payable to |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | General Motors in 1998 (Note 4)                                                                                           |                 |                                      | 1,647        |       |        |        | 3,141 |      
|                                                      
|                                                      
|                                                      
|                                                      
|Pension benefits (Note 5)                              |                                                                                                                           |                 | 1,543                                |              |       |        | 2,180  |      
|                                                      
|                                                      
|                                                      
|                                                      
|Postretirement benefits other than pensions (Note 5)   |                                                                                                                           |                 | 4,938                                |              |       |        | 4,573  |      
|                                                      
|                                                      
|                                                      
|                                                      
|Other liabilities                                      |                                                                                                                           |                 | 1,640                                |              |       |        | 1,546  |      
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                       |                                                                                                                           |                 | Total liabilities                    |              |       | 14,532 |        |       |       | 15,497 | 
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|Stockholders equity (Note 6):                         |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Common stock, $0.01 par value, 1,350 million shares
	authorized, 565 million and 465 million shares issued,
	respectively |                 |                                      | 6            |       |        |        |      |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Additional paid in capital                                                                                                |                 |                                      | 3,233        |       |        |        |      |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Retained earnings                                                                                                         |                 |                                      | 735          |       |        |        |      |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | General Motors net investment                                                                                            |                 |                                      |             |       |        |        | 77    |      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Accumulated translation adjustments                                                                                       |                 |                                      | (195         | )     |        |        | (68   | )    
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Treasury stock, at cost (4 million shares in 1999)                                                                        |                 |                                      | (67          | )     |        |        |      |      
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|                                                       |                                                                                                                           |                 | Total stockholders equity           |              |       | 3,712  |        |       |       | 9      | 
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      
|Total liabilities and stockholders equity             |                                                                                                                           | $               | 18,244                               |              |       | $      | 15,506 |      
|                                                       |                                                                                                                           |                 |                                      |              |       |        |        |      

See notes to consolidated financial statements.

4



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##### Table of Contents










DELPHI AUTOMOTIVE SYSTEMS CORPORATION


CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |      |      |      |  
|----------------------------------------------------------------- | ------------------------------------------------------------------------------------- | ------------------------------------------ | ----------------------------------------- | ----- | ------ | ------ | -- | ---- | ---- | ---- | -
|                                                                  |                                                                                       |                                           
|                                                                  |                                                                                       | Nine Months Ended                         
|                                                                  |                                                                                       | September 30,                             
|                                                                  |                                                                                       |                                           
|                                                                  |                                                                                       | 1999                                       |                                           | 1998 
|                                                                  |                                                                                       |                                            |                                           |      
|                                                                  |                                                                                       |                                           
|                                                                  |                                                                                       | (in millions)                             
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Cash flows from operating activities:                             |                                                                                       |                                            |                                           |       |        |        |    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Net income (loss)                                                                     |                                            | $                                         | 814   |        |        | $  | (181 | )   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Adjustments to reconcile net income (loss) to net cash used
	in operating activities: |                                            |                                           |       |        |        |    |      |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Depreciation and amortization              |                                           |       | 646    |        |    |      | 731  |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Pre-tax loss on disposal of business units |                                           |       |       |        |    |      | 430  |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Changes in operating assets and liabilities:                                          |                                            |                                           |       |        |        |    |      |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Accounts receivable, net                   |                                           |       | (4,150 | )      |    |      | 101  |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Inventories, net (Note 3)                  |                                           |       | 169    |        |    |      | 266  |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Prepaid expenses and other assets          |                                           |       | 2      |        |    |      | (32  | )   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Deferred income taxes                      |                                           |       | 106    |        |    |      | 75   |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Accounts payable                           |                                           |       | 648    |        |    |      | (299 | )   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Accrued liabilities                        |                                           |       | 269    |        |    |      | (159 | )   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Other long-term liabilities (Note 5)       |                                           |       | (275   | )      |    |      | (783 | )   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Other                                      |                                           |       | (157   | )      |    |      | (200 | )   
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     
|                                                                  |                                                                                       |                                            | Net cash used in operating activities     |       |        | (1,928 | )  |      |      | (51  | )
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     
|Cash flows from investing activities:                             |                                                                                       |                                            |                                           |       |        |        |    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Capital expenditures                                                                  |                                            |                                           | (808  | )      |        |    | (872 | )   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Acquisition of marketable securities                                                  |                                            |                                           | (144  | )      |        |    | (531 | )   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Liquidation of marketable securities                                                  |                                            |                                           | 108   |        |        |    | 522  |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Other                                                                                 |                                            |                                           | 87    |        |        |    | 182  |     
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     
|                                                                  |                                                                                       |                                            | Net cash used in investing activities     |       |        | (757   | )  |      |      | (699 | )
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     
|Cash flows from financing activities:                             |                                                                                       |                                            |                                           |       |        |        |    |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Proceeds from issuance of common stock (Note 2)                                       |                                            |                                           | 1,621 |        |        |    |     |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Net repayments of credit facilities and other debt (Note 4)                           |                                            |                                           | (71   | )      |        |    |     |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Proceeds from issuance of debt securities (Note 4)                                    |                                            |                                           | 1,484 |        |        |    |     |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Dividend payments                                                                     |                                            |                                           | (40   | )      |        |    |     |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Purchase of treasury stock                                                            |                                            |                                           | (67   | )      |        |    |     |     
|                                                                  | Cash effect of assets and liabilities transferred to General                          |                                            |                                           |       |        |        |    |      |     
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |                                                                                       | Motors                                     |                                           |       |       |        |    |      | 741  |     
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     
|                                                                  |                                                                                       |                                            | Net cash provided by financing activities |       |        | 2,927  |    |      |      | 741  |  
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     
|Effect of exchange rate fluctuations on cash and cash equivalents |                                                                                       |                                            | (20                                       | )     |        |        |   |     
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     
|Increase (decrease) in cash and cash equivalents                  |                                                                                       |                                            | 222                                       |       |        |        | (9 | )   
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | Cash and cash equivalents at beginning of period                                      |                                            |                                           | 995   |        |        |    | 989  |     
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     
|                                                                  | Cash and cash equivalents at end of period                                            |                                            | $                                         | 1,217 |        |        | $  | 980  |     
|                                                                  |                                                                                       |                                            |                                           |       |        |        |    |     

See notes to consolidated financial statements.

5



---



##### Table of Contents








DELPHI AUTOMOTIVE SYSTEMS CORPORATION


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1.  BACKGROUND

Delphi Automotive Systems Corporation (Delphi) is the
 worlds largest and most diversified supplier of automotive
 components, integrated systems and modules to the automotive
industry. We became an independent company during 1999 through a
series of transactions (the Separation) which are
described in further detail below. We were incorporated in late
1998 as a wholly owned subsidiary of General Motors Corporation
(General Motors or GM). Prior to our
incorporation we operated our business as a captive component
supplier. The Separation occurred in two stages, the first of
which involved an offering to the public of 100 million
shares of Delphis $0.01 par value common stock in
February 1999 (the IPO). The second stage
involved the distribution of Delphis remaining shares owned
 by GM (the Spin-Off). To effect the Spin-Off, a
dividend was declared on GM $1 2/3 par value common stock
payable on May 28, 1999 to holders of record as of
May 25, 1999. The dividend resulted in a distribution of
about 452.6 million shares, or 80.1%, of Delphis
outstanding common stock. The remaining 12.4 million shares
owned by GM were contributed on May 28, 1999 to a voluntary
employees beneficiary association trust for GMs U.S.
hourly employees.

2.  BASIS OF PRESENTATION

GeneralThe consolidated financial statements
and notes thereto included in this report should be read in
conjunction with our consolidated financial statements and notes
thereto included in our 1998 Annual Report on Form 10-K
filed with the Securities and Exchange Commission.

Effective January 1, 1999, the assets and liabilities of the
 Delphi business sector were transferred to Delphi and its
subsidiaries in accordance with the terms of a master separation
agreement to which Delphi and GM are parties (the
Separation Agreement). The consolidated financial
statements as of and for the three and nine months ended
September 30, 1999 and the December 31, 1998
consolidated balance sheet give effect to the terms of the
Separation Agreement. The consolidated statements of income for
the three and nine months ended September 30, 1998 and cash
flows for the nine months ended September 30, 1998 reflect
the historical results of operations and cash flows of the
businesses that were considered part of GMs Delphi business
 sector during that period. As a result, such 1998 financial data
 do not reflect the many significant changes that occurred in the
 operation and funding of Delphi in connection with our
separation from GM and the IPO during 1999.

All intercompany transactions and balances between Delphi
businesses have been eliminated. In the opinion of management,
all adjustments, consisting of only normal recurring items, which
 are necessary for a fair presentation have been included. The
results for interim periods are not necessarily indicative of
results which may be expected from any other interim period or
for the full year and may not necessarily reflect the
consolidated results of operations, financial position and cash
flows of Delphi in the future or that would have occurred in the
past had Delphi been a separate, stand-alone entity during the
periods presented.

Certain items in the 1998 financial statements have been
reclassified to conform with the 1999 presentation.

1998 Pro Forma Financial InformationFor
comparative purposes, the following financial data has been
adjusted to give effect to the IPO and the terms of the
Separation Agreement, exclusive of arrangements relating to the
transfer of the assets and liabilities to Delphi, as such terms
were considered in preparing the December 31, 1998
historical consolidated balance sheet.

The pro forma condensed consolidated statement of income data has
 been prepared as if our separation from GM and the IPO had taken
 place on January 1, 1998. The pro forma condensed
consolidated balance sheet data has been prepared as if the
transactions described below and the IPO occurred on
December 31, 1998. The pro forma condensed statement of
income data and pro forma consolidated balance sheet data do not
purport to project our financial position or results of
operations for any future date. The pro forma adjustments are
based upon available information and certain assumptions believed
 to be reasonable. The pro forma condensed statement of income
data and pro forma consolidated balance sheet data should be read
 in conjunction with Managements Discussion and
Analysis of Financial Condition and Results of Operations,
appearing elsewhere in this report, as well as our Annual Report
on Form 10-K for the fiscal year ended December 31,
1998.

6



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##### Table of Contents



Unaudited Pro forma Condensed Consolidated Statement of Income

For the Three Months Ended September 30, 1998


|                         |                                             |                          |       |               |       |           |    |     |      |   |       |       |       | 
|------------------------ | ------------------------------------------- | ------------------------ | ----- | ------------- | ----- | --------- | -- | --- | ---- | - | ----- | ----- | ----- | 
|                         |                                             | Historical               |       | Adjustments   |       | Pro Forma
|                         |                                             |                          |       |               |       |          
|                         |                                             |                          |       | (in millions) |       |          
|                        
|                        
|                        
|                        
|Net sales                |                                             | $                        | 6,015 |               |       |           |    |     |      | $ | 6,015 |      
|                        
|                        
|                        
|                        
|Less operating expenses: |                                             |                          |       |               |       |           |    |     |      |   |       |      
|                        
|                        
|                        
|                        
|                         | Cost of sales, excluding items listed below |                          |       | 6,151         |       |           | $  | (62 | )(1) |   |       | 6,089 |      
|                        
|                        
|                        
|                        
|                         | Selling, general, and administrative        |                          |       | 345           |       |           |    | (3  | )(1) |   |       |       |      
|                         |                                             |                          |       |               |       |           | 38 | (2) |      |   | 380   |      
|                        
|                        
|                        
|                        
|                         | Depreciation and amortization               |                          |       | 248           |       |           |    |     |      |   |       | 248   |      
|                         |                                             |                          |       |               |       |           |    |     |      |   |       |      
|                         |                                             | Total operating expenses |       |               | 6,744 |           |    |     | (27  | ) |       |       | 6,717 | 
|                         |                                             |                          |       |               |       |           |    |     |      |   |       |      
|Operating loss           |                                             |                          | (729  | )             |       |           | 27 |     |      |   | (702  | )    
|                        
|                        
|                        
|                        
|Less interest expense    |                                             |                          | 68    |               |       |           |    |     |      |   | 68    |      
|                        
|                        
|                        
|                        
|Other expense, net       |                                             |                          | (10   | )             |       |           |    |     |      |   | (10   | )    
|                         |                                             |                          |       |               |       |           |    |     |      |   |       |      
|Loss before income taxes |                                             |                          | (807  | )             |       |           | 27 |     |      |   | (780  | )    
|                        
|                        
|                        
|                        
|Income tax benefit       |                                             |                          | (307  | )             |       |           | 12 | (3) |      |   | (295  | )    
|                         |                                             |                          |       |               |       |           |    |     |      |   |       |      
|Net loss                 |                                             | $                        | (500  | )             |       | $         | 15 |     |      | $ | (485  | )    
|                         |                                             |                          |       |               |       |           |    |     |      |   |       |      

Unaudited Pro forma Condensed Consolidated Statement of Income

For the Nine Months Ended September 30, 1998


|                         |                                             |                          |        |               |        |           |     |      |      |   |        |        |        | 
|------------------------ | ------------------------------------------- | ------------------------ | ------ | ------------- | ------ | --------- | --- | ---- | ---- | - | ------ | ------ | ------ | 
|                         |                                             | Historical               |        | Adjustments   |        | Pro Forma
|                         |                                             |                          |        |               |        |          
|                         |                                             |                          |        | (in millions) |        |          
|                        
|                        
|                        
|                        
|Net sales                |                                             | $                        | 20,679 |               |        |           |     |      |      | $ | 20,679 |       
|                        
|                        
|                        
|                        
|Less operating expenses: |                                             |                          |        |               |        |           |     |      |      |   |        |       
|                        
|                        
|                        
|                        
|                         | Cost of sales, excluding items listed below |                          |        | 19,220        |        |           | $   | (186 | )(1) |   |        | 19,034 |       
|                        
|                        
|                        
|                        
|                         | Selling, general, and administrative        |                          |        | 1,012         |        |           |     | (11  | )(1) |   |        |        |       
|                         |                                             |                          |        |               |        |           | 114 | (2)  |      |   | 1,115  |       
|                        
|                        
|                        
|                        
|                         | Depreciation and amortization               |                          |        | 731           |        |           |     |      |      |   |        | 731    |       
|                         |                                             |                          |        |               |        |           |     |      |      |   |        |       
|                         |                                             | Total operating expenses |        |               | 20,963 |           |     |      | (83  | ) |        |        | 20,880 | 
|                         |                                             |                          |        |               |        |           |     |      |      |   |        |       
|Operating loss           |                                             |                          | (284   | )             |        |           | 83  |      |      |   | (201   | )     
|                        
|                        
|                        
|                        
|Less interest expense    |                                             |                          | 199    |               |        |           |     |      |      |   | 199    |       
|                        
|                        
|                        
|                        
|Other income, net        |                                             |                          | 124    |               |        |           |     |      |      |   | 124    |       
|                         |                                             |                          |        |               |        |           |     |      |      |   |        |       
|Loss before income taxes |                                             |                          | (359   | )             |        |           | 83  |      |      |   | (276   | )     
|                        
|                        
|                        
|                        
|Income tax benefit       |                                             |                          | (178   | )             |        |           | 32  | (3)  |      |   | (146   | )     
|                         |                                             |                          |        |               |        |           |     |      |      |   |        |       
|Net loss                 |                                             | $                        | (181   | )             |        | $         | 51  |      |      | $ | (130   | )     
|                         |                                             |                          |        |               |        |           |     |      |      |   |        |       

7



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##### Table of Contents



Unaudited Pro Forma Condensed Consolidated Balance Sheet

As of December 31, 1998


|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |       |     |        | 
|---------------------------------------------------------------------- | --------------------------------------------------- | --------------- | ------------------------- | ----------- | ----- | --------- | ------ | ----- | ----- | ----- | ------ | ----- | --- | ------ | 
|                                                                       |                                                     | Historical      |                           | Adjustments |       | Pro Forma
|                                                                       |                                                     |                 |                           |             |       |          
|                                                                       |                                                     |                
|                                                                       |                                                     | (in millions)  
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|ASSETS                                                                 |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Current assets:                                                        |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Cash and marketable securities                      |                 | $                         | 1,000       |       |           | $      | 1,621 | (4)   |       |        |       |    
|                                                                       |                                                     |                 |                           |             |       |           | (2,100 | )(5)  |       |       |        |      
|                                                                       |                                                     |                 |                           |             |       |           | 3,141  | (6)   |       |       |        |      
|                                                                       |                                                     |                 |                           |             |       |           | (1,600 | )(7)  |       | $     | 2,062  |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Accounts receivable, net:                           |                 |                           |             |       |           |        |       |       |       |        |       |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       |                                                     | General Motors  |                           |             | 2,236 |           |        |       | 2,100 | (5)   |        |       |     |       
|                                                                       |                                                     |                 |                           |             |       |           | (1,600 | )(6)  |       |       |        |      
|                                                                       |                                                     |                 |                           |             |       |           | 1,600  | (7)   |       |       | 4,336  |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       |                                                     | Other customers |                           |             | 977   |           |        |       |       |       |        |       | 977 |       
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Inventories, net                                    |                 |                           | 1,770       |       |           |        |       |       |       |        | 1,770 |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Deferred income taxes                               |                 |                           | 285         |       |           |        |       |       |       |        | 285   |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Prepaid expenses and other assets                   |                 |                           | 137         |       |           |        |       |       |       |        | 137   |    
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                       |                                                     |                 | Total current assets      |             |       | 6,405     |        |       |       | 3,162 |        |       |     | 9,567  | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Property, net                                                          |                                                     |                 | 4,965                     |             |       |           |        |       |       |       | 4,965  |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Deferred income taxes                                                  |                                                     |                 | 2,813                     |             |       |           |        |       |       |       | 2,813  |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other assets                                                           |                                                     |                 | 1,323                     |             |       |           |        |       |       |       | 1,323  |      
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|Total assets                                                           |                                                     | $               | 15,506                    |             |       | $         | 3,162  |       |       | $     | 18,668 |      
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|LIABILITIES AND EQUITY                                                 |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Current liabilities:                                                   |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Notes payable and current portion of long-term debt |                 | $                         | 359         |       |           |        |       |       |       | $      | 359   |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Accounts payable                                    |                 |                           | 2,260       |       |           |        |       |       |       |        | 2,260 |    
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Accrued liabilities                                 |                 |                           | 1,438       |       |           |        |       |       |       |        | 1,438 |    
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                       |                                                     |                 | Total current liabilities |             |       | 4,057     |        |       |       |       |        |       |     | 4,057  | 
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Long-term debt, including intracompany note payable to General
	Motors |                                                     |                 | 3,141                     |             |       | $         | (3,141 | )(6)  |       |       |        |      
|                                                                       |                                                     |                 |                           |             |       |           | 3,141  | (6)   |       |       | 3,141  |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Pension benefits                                                       |                                                     |                 | 2,180                     |             |       |           |        |       |       |       | 2,180  |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Postretirement benefits other than pensions                            |                                                     |                 | 4,573                     |             |       |           |        |       |       |       | 4,573  |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|Other liabilities                                                      |                                                     |                 | 1,546                     |             |       |           |        |       |       |       | 1,546  |      
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                       |                                                     |                 | Total liabilities         |             |       | 15,497    |        |       |       |      |        |       |     | 15,497 | 
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|Equity:                                                                |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Common stock                                        |                 |                           |            |       |           |        | 1     | (4)   |       |        |       |    
|                                                                       |                                                     |                 |                           |             |       |           | 5      | (8)   |       |       | 6      |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Additional paid in capital                          |                 |                           |            |       |           |        | 1,620 | (4)   |       |        |       |    
|                                                                       |                                                     |                 |                           |             |       |           | 1,613  | (8)   |       |       | 3,233  |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | General Motors net investment                      |                 |                           | 77          |       |           |        | 1,541 | (6)   |       |        |       |    
|                                                                       |                                                     |                 |                           |             |       |           | (1,618 | )(8)  |       |       |       |      
|                                                                      
|                                                                      
|                                                                      
|                                                                      
|                                                                       | Accumulated translation adjustments                 |                 |                           | (68         | )     |           |        |       |       |       |        | (68   | )  
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|                                                                       |                                                     |                 | Total equity              |             |       | 9         |        |       |       | 3,162 |        |       |     | 3,171  | 
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      
|Total liabilities and equity                                           |                                                     | $               | 15,506                    |             |       | $         | 3,162  |       |       | $     | 18,668 |      
|                                                                       |                                                     |                 |                           |             |       |           |        |       |       |       |        |      

8



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##### Table of Contents



The following pro forma adjustments were made to reflect the
terms of the Separation Agreement and the IPO:



| |     |                                                                                                                                                                                                                                                                                             
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Delphi and General Motors have entered into agreements regarding
	certain employee benefit obligations. The resulting pro forma
	increases (decreases) in pension and other postretirement
	benefit costs for the three and nine months ended
	September 30, 1998 are summarized as follows:

|                                                             |       |               |      |             |   |   |      |      |  
|------------------------------------------------------------ | ----- | ------------- | ---- | ----------- | - | - | ---- | ---- | -
|                                                             |       | Three Months  |      | Nine Months
|                                                             |       |               |      |            
|                                                             |       |              
|                                                             |       | (in millions)
|                                                            
|                                                            
|                                                            
|                                                            
|Pension related costs                                        |       | $             | 52   |             |   | $ | 158  |     
|                                                            
|                                                            
|                                                            
|                                                            
|Postretirement benefits other than pension                   |       |               | (117 | )           |   |   | (355 | )   
|                                                             |       |               |      |             |   |   |      |     
|                                                             | Total |               | $    | (65         | ) |   | $    | (197 | )
|                                                             |       |               |      |             |   |   |      |     
|Portion attributable to cost of sales                        |       | $             | (62  | )           |   | $ | (186 | )   
|                                                             |       |               |      |             |   |   |      |     
|Portion attributable to selling, general, and administrative |       | $             | (3   | )           |   | $ | (11  | )   
|                                                             |       |               |      |             |   |   |      |     



| |     |                                                                                                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Reflects the estimated incremental selling, general and
	administrative costs associated with operating Delphi as a
	stand-alone publicly traded company. The resulting pro forma
	adjustments for the three and nine months ended
	September 30, 1998 are as follows:

|                                          |       |               |    |             |  |   |    |     | 
|----------------------------------------- | ----- | ------------- | -- | ----------- |  | - | -- | --- | 
|                                          |       | Three Months  |    | Nine Months
|                                          |       |               |    |            
|                                          |       |              
|                                          |       | (in millions)
|                                         
|                                         
|                                         
|                                         
|Incremental insurance and risk management |       | $             | 9  |             |  | $ | 27 |    
|                                         
|                                         
|                                         
|                                         
|Incremental corporate costs*              |       |               | 12 |             |  |   | 36 |    
|                                         
|                                         
|                                         
|                                         
|Taxes other than income                   |       |               | 13 |             |  |   | 39 |    
|                                         
|                                         
|                                         
|                                         
|Other*                                    |       |               | 4  |             |  |   | 12 |    
|                                          |       |               |    |             |  |   |    |    
|                                          | Total |               | $  | 38          |  |   | $  | 114 | 
|                                          |       |               |    |             |  |   |    |    



|  |                                                                                                                                                                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Incremental corporate costs include additional personnel and
	systems costs required to operate independently and reflect
	transitional service arrangements with General Motors at terms
	provided in the Separation Agreement. Other costs include certain
	 sales tax expenses associated with the Separation.



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (3) | Income taxes were determined in accordance with the provisions of
	 SFAS No. 109, Accounting for Income Taxes. For
	purposes of this pro forma presentation, adjustments necessary to
	 record the income tax effect of the pro forma adjustments assume
	 a combined federal and state income tax rate of 38%.                                                                                                                                                         
|
| | (4) | Reflects the net proceeds from the sale of 100,000,000 shares of
	common stock in the IPO at a price of $17.00 per share. The
	IPO proceeds were used for general corporate purposes, including
	working capital requirements that were impacted by the change in
	General Motors accounts receivable payment terms described in
	note (5) below.                                                                                                                         
|
| | (5) | Reflects the change in payment terms for intracompany accounts
	receivable from General Motors in accordance with the terms of
	the Separation Agreement. Such payment terms, which generally
	called for payment in the month following shipment by Delphi,
	were modified to require payment by General Motors on the second
	day of the second month following shipment by Delphi.                                                                                     
|
| | (6) | Reflects the settlement of certain intracompany accounts
	receivable from GM with the intracompany note payable to GM. On
	January  1, 1999, immediately prior to the transactions
	contemplated by the Separation Agreement, certain intracompany
	accounts receivable from GM, of about $1.6 billion, were
	settled with the $3.1  billion outstanding intracompany note
	 payable to GM with the difference resulting in an increase in
	GMs net investment in Delphi.
|
| | (7) | Reflects the required adjustment, subsequent to the settlement of
	 intracompany accounts receivable described in note (6)
	above, to adjust cash and accounts receivable balances to levels
	that are indicative of amounts associated with ongoing
	operations.                                                                                                                                                                                                         
|
| | (8) | Reflects the adjustment to equity to reclassify GMs net
	investment as common stock and additional paid-in capital.                                                                                                                                                                                                                                                                                                                                                      

9



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##### Table of Contents



Earnings Per ShareThe historical basic
earnings per share amounts were computed using weighted average
shares outstanding for each respective period. Diluted earnings
per share also reflects the weighted average impact of all
potentially dilutive securities during the periods presented
unless the inclusion would have an antidilutive effect. Diluted
shares outstanding include the impact of:



| |   |                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------
| |  | Dilutive securities issued concurrent with the IPO in February
	1999.                                                                          
|
| |  | Stock options issued in connection with the concurrent
	cancellation of GM stock options held by Delphi employees at the
	date of the Spin-Off.

For historical computations, dilutive securities are only
considered in the weighted average shares outstanding from the
date of issuance. Weighted average shares outstanding used in
calculating historical basic and diluted earnings per share were:

|                                    |  |                    |         |                   |  |      |         |      |  |  |         |  |  |  |         | 
|----------------------------------- |  | ------------------ | ------- | ----------------- |  | ---- | ------- | ---- |  |  | ------- |  |  |  | ------- | 
|                                    |  |                    |         |                  
|                                    |  | Three Months Ended |         | Nine Months Ended
|                                    |  | September 30,      |         | September 30,    
|                                    |  |                    |         |                  
|                                    |  | 1999               |         | 1998              |  | 1999 |         | 1998
|                                    |  |                    |         |                   |  |      |         |     
|                                    |  |                   
|                                    |  | (in thousands)    
|                                   
|                                   
|                                   
|                                   
|Weighted average shares outstanding |  |                    | 562,955 |                   |  |      | 465,000 |      |  |  | 549,659 |  |  |  | 465,000 | 
|                                   
|                                   
|                                   
|                                   
|Effect of dilutive securities       |  |                    | 3,518   |                   |  |      |        |      |  |  | 1,780   |  |  |  |        | 
|                                    |  |                    |         |                   |  |      |         |      |  |  |         |  |  |  |         | 
|Diluted shares outstanding          |  |                    | 566,473 |                   |  |      | 465,000 |      |  |  | 551,439 |  |  |  | 465,000 | 
|                                    |  |                    |         |                   |  |      |         |      |  |  |         |  |  |  |         | 

For comparative purposes, management has calculated basic and
diluted weighted average shares outstanding as if shares issued
in the IPO were outstanding since January 1, 1998. On this
basis, shares outstanding after considering the pro forma impact
of the terms of the Separation were:

|                                    |  |                    |         |                   |  |      |         |      |  |  |         |  |  |  |         | 
|----------------------------------- |  | ------------------ | ------- | ----------------- |  | ---- | ------- | ---- |  |  | ------- |  |  |  | ------- | 
|                                    |  |                    |         |                  
|                                    |  | Three Months Ended |         | Nine Months Ended
|                                    |  | September 30,      |         | September 30,    
|                                    |  |                    |         |                  
|                                    |  | 1999               |         | 1998              |  | 1999 |         | 1998
|                                    |  |                    |         |                   |  |      |         |     
|                                    |  |                   
|                                    |  | (in thousands)    
|                                   
|                                   
|                                   
|                                   
|Weighted average shares outstanding |  |                    | 562,955 |                   |  |      | 565,000 |      |  |  | 564,311 |  |  |  | 565,000 | 
|                                   
|                                   
|                                   
|                                   
|Effect of dilutive securities       |  |                    | 3,518   |                   |  |      |        |      |  |  | 1,780   |  |  |  |        | 
|                                    |  |                    |         |                   |  |      |         |      |  |  |         |  |  |  |         | 
|Diluted shares outstanding          |  |                    | 566,473 |                   |  |      | 565,000 |      |  |  | 566,091 |  |  |  | 565,000 | 
|                                    |  |                    |         |                   |  |      |         |      |  |  |         |  |  |  |         | 

3.  INVENTORIES, NET

Inventories, net consisted of:

|                                                                             |                           |               |       |              |  |   |       |       | 
|---------------------------------------------------------------------------- | ------------------------- | ------------- | ----- | ------------ |  | - | ----- | ----- | 
|                                                                             |                           | September 30, |       | December 31,
|                                                                             |                           | 1999          |       | 1998        
|                                                                             |                           |               |       |             
|                                                                             |                           |              
|                                                                             |                           | (in millions)
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Productive material, work-in-process and supplies                            |                           | $             | 1,773 |              |  | $ | 1,910 |      
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Finished goods                                                               |                           |               | 221   |              |  |   | 253   |      
|                                                                             |                           |               |       |              |  |   |       |      
|                                                                             | Total inventories at FIFO |               |       | 1,994        |  |   |       | 2,163 | 
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Less allowances to adjust the carrying value of certain
	inventories to LIFO |                           |               | (393  | )            |  |   | (393  | )    
|                                                                             |                           |               |       |              |  |   |       |      
|                                                                             | Total inventories, net    |               | $     | 1,601        |  |   | $     | 1,770 | 
|                                                                             |                           |               |       |              |  |   |       |      

4.  DEBT

On May 4, 1999, we completed a public offering of unsecured
term debt securities totaling $1.5 billion with maturities
of five years, ten years and thirty years. The offering consisted
 of $500 million of securities bearing interest at 6.125%
and maturing on May 1, 2004, $500 million of securities
 bearing interest at 6.50% and maturing on May 1, 2009, and
$500 million of securities bearing interest at 7.125% and
maturing on May 1, 2029. We used the proceeds of the debt
offering to refinance amounts previously outstanding under the
long-term portion of our revolving credit facilities. Subsequent
to the term debt offering, the $4.9 billion previously
available under our revolving credit facilities was reduced to
$3.0 billion in available funds, generally split between
364-day and five year tranches. In May 1999, we entered into
 a commercial paper program providing up to $1.0 billion of
available borrowings. The commercial paper program was amended in
 July 1999 to provide availability of up to
$1.5 billion. As of September 30, 1999, there were no
amounts outstanding under the revolving credit facility or the
commercial paper program.

10



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##### Table of Contents



5.  PENSION AND OTHER POSTRETIREMENT BENEFITS

Until May 28, 1999, Delphis U.S. hourly employees
continued to participate in the defined benefit pension plan and
other postretirement plans administered by GM. Effective
May 28, 1999, pension and other postretirement obligations
under the GM plans relating to Delphis U.S. active and
inactive employees were assumed by Delphi plans subject to the
provisions described below. The Delphi plans were established and
 are being administered under the same terms that existed under
the GM plans. GMs pension plan assets were divided between
the pension trusts for qualified plans of Delphi and GM so that
each plans trust received the legally required amount to
meet applicable benefit and tax regulations.

On September 30, 1999, we made a $300 million voluntary
 cash contribution to the Delphi pension trust to further fund
the plan obligations, bringing our year-to-date voluntary funding
 to $900 million.

Under the terms of the Separation Agreement, Delphi U.S. hourly
employees who retire on or before October 1, 1999 are
treated as GM employees for purposes of pension and other
postretirement benefit obligations. The initial allocation of
pension and other postretirement benefit obligations between
Delphi and GM assumed certain levels of U.S. hourly retirements
on or before October 1, 1999. Delphi will record a fourth
quarter 1999 adjustment of GMs initial investment in Delphi
 to reflect the impact of changes in pension and other
postretirement benefit obligations resulting from differences
between the actual number of retirements and the estimate used in
 generating the initial allocation. Retirements above the
estimate used in generating the initial allocation of pension and
 other postretirement benefits could also result in cash payments
 to GM, the amount and timing of which have not yet been
determined and agreed upon by Delphi and GM. Such payments, when
determined and agreed upon, may be significant.

6.  STOCKHOLDERS EQUITY

Changes in stockholders equity for the nine months ended
September 30, 1999 were:

|                                             |  |               |     |            |  |          |   |             |  |             |       |       |  |   |     |   |  |   |      |   |  |   |     |  
|-------------------------------------------- |  | ------------- | --- | ---------- |  | -------- | - | ----------- |  | ----------- | ----- | ----- |  | - | --- | - |  | - | ---- | - |  | - | --- | -
|                                             |  |               |     |            |  |          |   |             |  |            
|                                             |  | Common Stock  |     | Additional |  |          |   | Accumulated |  |            
|                                             |  |               |     | Paid in    |  | Retained |   | Translation |  | Treasury   
|                                             |  | Shares        |     | Amount     |  | Capital  |   | Earnings    |  | Adjustments |       | Stock
|                                             |  |               |     |            |  |          |   |             |  |             |       |      
|                                             |  |              
|                                             |  | (in millions)
|                                            
|                                            
|                                            
|                                            
|Balance at January 1, 1999                   |  |               |     |            |  |          |   |             |  |             |       |       |  |   |     |   |  | $ | (68  | ) |  |   |     |  
|                                            
|                                            
|                                            
|                                            
|Stock split                                  |  |               | 465 |            |  | $        | 5 |             |  |             |       |       |  |   |     |   |  |   |      |   |  |   |     |  
|                                            
|                                            
|                                            
|                                            
|Settlement of intracompany balances          |  |               |     |            |  |          |   |             |  |             |       |       |  |   |     |   |  |   |      |   |  |   |     |  
|                                            
|                                            
|                                            
|                                            
|Reclassify GMs net investment               |  |               |     |            |  |          |   |             |  | $           | 1,613 |       |  |   |     |   |  |   |      |   |  |   |     |  
|                                            
|                                            
|                                            
|                                            
|Issuance of common shares                    |  |               | 100 |            |  |          | 1 |             |  |             | 1,620 |       |  |   |     |   |  |   |      |   |  |   |     |  
|                                            
|                                            
|                                            
|                                            
|Shares reacquired for employee benefit plans |  |               |     |            |  |          |   |             |  |             |       |       |  |   |     |   |  |   |      |   |  | $ | (67 | )
|                                            
|                                            
|                                            
|                                            
|Net income                                   |  |               |     |            |  |          |   |             |  |             |       |       |  | $ | 814 |   |  |   |      |   |  |   |     |  
|                                            
|                                            
|                                            
|                                            
|Dividends                                    |  |               |     |            |  |          |   |             |  |             |       |       |  |   | (79 | ) |  |   |      |   |  |   |     |  
|                                            
|                                            
|                                            
|                                            
|Foreign currency translation adjustments     |  |               |     |            |  |          |   |             |  |             |       |       |  |   |     |   |  |   | (127 | ) |  |   |     |  
|                                             |  |               |     |            |  |          |   |             |  |             |       |       |  |   |     |   |  |   |      |   |  |   |     |  
|Balance at September 30, 1999                |  |               | 565 |            |  | $        | 6 |             |  | $           | 3,233 |       |  | $ | 735 |   |  | $ | (195 | ) |  | $ | (67 | )
|                                             |  |               |     |            |  |          |   |             |  |             |       |       |  |   |     |   |  |   |      |   |  |   |     |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                             |  |               |        |               |  |   |       |  
|-------------------------------------------- |  | ------------- | ------ | ------------- |  | - | ----- | -
|                                             |  | General       |        | Total        
|                                             |  | Motors Net   |        | Stockholders
|                                             |  | Investment    |        | Equity       
|                                             |  |               |        |              
|                                             |  |              
|                                             |  | (in millions)
|                                            
|                                            
|                                            
|                                            
|Balance at January 1, 1999                   |  | $             | 77     |               |  | $ | 9     |  
|                                            
|                                            
|                                            
|                                            
|Stock split                                  |  |               | (5     | )             |  |   |      |  
|                                            
|                                            
|                                            
|                                            
|Settlement of intracompany balances          |  |               | 1,541  |               |  |   | 1,541 |  
|                                            
|                                            
|                                            
|                                            
|Reclassify GMs net investment               |  |               | (1,613 | )             |  |   |      |  
|                                            
|                                            
|                                            
|                                            
|Issuance of common shares                    |  |               |        |               |  |   | 1,621 |  
|                                            
|                                            
|                                            
|                                            
|Shares reacquired for employee benefit plans |  |               |        |               |  |   | (67   | )
|                                            
|                                            
|                                            
|                                            
|Net income                                   |  |               |        |               |  |   | 814   |  
|                                            
|                                            
|                                            
|                                            
|Dividends                                    |  |               |        |               |  |   | (79   | )
|                                            
|                                            
|                                            
|                                            
|Foreign currency translation adjustments     |  |               |        |               |  |   | (127  | )
|                                             |  |               |        |               |  |   |       |  
|Balance at September 30, 1999                |  | $             |       |               |  | $ | 3,712 |  
|                                             |  |               |        |               |  |   |       |  

In July 1999, the Board of Directors authorized the
acquisition of up to 19 million shares of Delphi common
stock for reissuance under stock option and other employee
benefit plans. As of September 30, 1999, approximately 4
million shares had been reacquired under this program at a total
cost of $67 million. Purchases of Delphi common stock are
recorded, at cost, as treasury stock and result in a reduction of
 stockholders equity.

11



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##### Table of Contents



7.  Segment Reporting

Selected information regarding our product sectors is as follows:

|                            |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |       |       | 
|--------------------------- | ---------------------------- | --------------- | - | ------------ | ----- | ---------- | - | -------- | ----- | ----- | - | ----- | ----- |  | - | ---- | ---- | - | - | ----- | ----- | 
|                            |                              |                 |   | Safety,      |       |            |   |          |       |      
|                            |                              | Electronics &   |   | Thermal &    |       |            |   |          |       |      
|                            |                              | Mobile          |   | Electrical   |       | Dynamics & |   |          |       |      
|                            |                              | Communication   |   | Architecture |       | Propulsion |   | Other(a) |       | Total
|                            |                              |                 |   |              |       |            |   |          |       |      
|                            |                              |                
|                            |                              | (in millions)  
|                           
|                           
|                           
|                           
|For the Three Months Ended: |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      
|September 30, 1999          |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      
|                           
|                           
|                           
|                           
|                            | Net sales to GM              |                 | $ | 946          |       |            | $ | 1,645    |       |       | $ | 2,511 |       |  | $ |     |      |   | $ | 5,102 |      
|                           
|                           
|                           
|                           
|                            | Net sales to other customers |                 |   | 182          |       |            |   | 761      |       |       |   | 745   |       |  |   |     |      |   |   | 1,688 |      
|                           
|                           
|                           
|                           
|                            | Inter-sector net sales       |                 |   | 97           |       |            |   | 39       |       |       |   | 11    |       |  |   | (147 | )    |   |   |      |      
|                            |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      
|                            |                              | Total net sales |   | $            | 1,225 |            |   | $        | 2,445 |       |   | $     | 3,267 |  |   | $    | (147 | ) |   | $     | 6,790 | 
|                            |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      
|                            | Operating income (loss)      |                 | $ | 110          |       |            | $ | 62       |       |       | $ | 46    |       |  | $ | (12  | )    |   | $ | 206   |      
|                            |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      
|September 30, 1998          |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      
|                           
|                           
|                           
|                           
|                            | Net sales to GM              |                 | $ | 781          |       |            | $ | 1,680    |       |       | $ | 2,180 |       |  | $ |     |      |   | $ | 4,641 |      
|                           
|                           
|                           
|                           
|                            | Net sales to other customers |                 |   | 159          |       |            |   | 645      |       |       |   | 570   |       |  |   |     |      |   |   | 1,374 |      
|                           
|                           
|                           
|                           
|                            | Inter-sector net sales       |                 |   | 55           |       |            |   | 44       |       |       |   | 2     |       |  |   | (101 | )    |   |   |      |      
|                            |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      
|                            |                              | Total net sales |   | $            | 995   |            |   | $        | 2,369 |       |   | $     | 2,752 |  |   | $    | (101 | ) |   | $     | 6,015 | 
|                            |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      
|                            | Operating loss(b)            |                 | $ | (3           | )     |            | $ | (405     | )     |       | $ | (217  | )     |  | $ | (104 | )    |   | $ | (729  | )    
|                            |                              |                 |   |              |       |            |   |          |       |       |   |       |       |  |   |      |      |   |   |      

|                           |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |        |        | 
|-------------------------- | ---------------------------- | --------------- | - | ------------ | ----- | ---------- | - | -------- | ----- | ----- | - | ----- | ------ |  | - | ---- | ---- | - | - | ------ | ------ | 
|                           |                              |                 |   | Safety,      |       |            |   |          |       |      
|                           |                              | Electronics &   |   | Thermal &    |       |            |   |          |       |      
|                           |                              | Mobile          |   | Electrical   |       | Dynamics & |   |          |       |      
|                           |                              | Communication   |   | Architecture |       | Propulsion |   | Other(a) |       | Total
|                           |                              |                 |   |              |       |            |   |          |       |      
|For the Nine Months Ended: |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       
|September 30, 1999         |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       
|                          
|                          
|                          
|                          
|                           | Net sales to GM              |                 | $ | 3,154        |       |            | $ | 5,521    |       |       | $ | 8,266 |        |  | $ |     |      |   | $ | 16,941 |       
|                          
|                          
|                          
|                          
|                           | Net sales to other customers |                 |   | 561          |       |            |   | 2,252    |       |       |   | 2,188 |        |  |   |     |      |   |   | 5,001  |       
|                          
|                          
|                          
|                          
|                           | Inter-sector net sales       |                 |   | 259          |       |            |   | 152      |       |       |   | 17    |        |  |   | (428 | )    |   |   |       |       
|                           |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       
|                           |                              | Total net sales |   | $            | 3,974 |            |   | $        | 7,925 |       |   | $     | 10,471 |  |   | $    | (428 | ) |   | $      | 21,942 | 
|                           |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       
|                           | Operating income (loss)      |                 | $ | 448          |       |            | $ | 526      |       |       | $ | 392   |        |  | $ | (74  | )    |   | $ | 1,292  |       
|                           |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       
|September 30, 1998         |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       
|                          
|                          
|                          
|                          
|                           | Net sales to GM              |                 | $ | 2,764        |       |            | $ | 6,030    |       |       | $ | 7,401 |        |  | $ |     |      |   | $ | 16,195 |       
|                          
|                          
|                          
|                          
|                           | Net sales to other customers |                 |   | 467          |       |            |   | 2,202    |       |       |   | 1,815 |        |  |   |     |      |   |   | 4,484  |       
|                          
|                          
|                          
|                          
|                           | Inter-sector net sales       |                 |   | 181          |       |            |   | 134      |       |       |   | 6     |        |  |   | (321 | )    |   |   |       |       
|                           |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       
|                           |                              | Total net sales |   | $            | 3,412 |            |   | $        | 8,366 |       |   | $     | 9,222  |  |   | $    | (321 | ) |   | $      | 20,679 | 
|                           |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       
|                           | Operating income (loss)(b)   |                 | $ | 190          |       |            | $ | (105     | )     |       | $ | (106  | )      |  | $ | (263 | )    |   | $ | (284   | )     
|                           |                              |                 |   |              |       |            |   |          |       |       |   |       |        |  |   |      |      |   |   |       

Certain 1998 sector results have been reclassified to conform
with the 1999 presentation.



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Other includes activity not allocated to the product sectors and
	the elimination of inter-sector transactions.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| | (b) | 1998 historical operating income (loss) does not reflect the
	reductions in employee benefit costs and higher other costs as a
	result of the Separation Agreement (see Note  2). In
	addition, during the third quarter we recorded a pre-tax loss of
	$430 million related to the divestiture of our seating,
	lighting, and coil spring businesses. After giving effect to the
	terms of the Separation Agreement, and excluding the loss on
	divested businesses, our operating income (loss) by product
	sector would have been (in millions):

|                                       |  |               |     |              |  |            |     |          |  |       |      |   |  |   |      |   |  |   |      |  
|-------------------------------------- |  | ------------- | --- | ------------ |  | ---------- | --- | -------- |  | ----- | ---- | - |  | - | ---- | - |  | - | ---- | -
|                                       |  |               |     | Safety,      |  |            |     |          |  |      
|                                       |  | Electronics & |     | Thermal &    |  |            |     |          |  |      
|                                       |  | Mobile        |     | Electrical   |  | Dynamics & |     |          |  |      
|                                       |  | Communication |     | Architecture |  | Propulsion |     | Other(a) |  | Total
|                                       |  |               |     |              |  |            |     |          |  |      
|Three months ended
	September 30, 1998 |  | $             | (13 | )            |  | $          | 19  |          |  | $     | (187 | ) |  | $ | (91  | ) |  | $ | (272 | )
|                                       |  |               |     |              |  |            |     |          |  |       |      |   |  |   |      |   |  |   |      |  
|Nine months ended
	September 30, 1998  |  | $             | 160 |              |  | $          | 321 |          |  | $     | (28  | ) |  | $ | (224 | ) |  | $ | 229  |  
|                                       |  |               |     |              |  |            |     |          |  |       |      |   |  |   |      |   |  |   |      |  

12



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##### Table of Contents





|   |                     
|-- | --------------------
|8. | COMPREHENSIVE INCOME

Our comprehensive income was:

|                                                                                        |  |               |     |               |  |      |      |      |  |   |      |   |  |   |      |  
|--------------------------------------------------------------------------------------- |  | ------------- | --- | ------------- |  | ---- | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                                                                                        |  |               |     |              
|                                                                                        |  | Three Months  |     | Nine Months  
|                                                                                        |  | Ended         |     | Ended        
|                                                                                        |  | September 30, |     | September 30,
|                                                                                        |  |               |     |              
|                                                                                        |  | 1999          |     | 1998          |  | 1999 |      | 1998
|                                                                                        |  |               |     |               |  |      |      |     
|                                                                                        |  |              
|                                                                                        |  | (in millions)
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|Net income (loss)                                                                       |  | $             | 136 |               |  | $    | (500 | )    |  | $ | 814  |   |  | $ | (181 | )
|                                                                                       
|                                                                                       
|                                                                                       
|                                                                                       
|Other comprehensive (loss) incomeforeign currency
	translation adjustments, net of tax |  |               | (8  | )             |  |      | 35   |      |  |   | (127 | ) |  |   | 41   |  
|                                                                                        |  |               |     |               |  |      |      |      |  |   |      |   |  |   |      |  
|Comprehensive income (loss)                                                             |  | $             | 128 |               |  | $    | (465 | )    |  | $ | 687  |   |  | $ | (140 | )
|                                                                                        |  |               |     |               |  |      |      |      |  |   |      |   |  |   |      |  



|   |                              
|-- | -----------------------------
|9. | COMMITMENTS AND CONTINGENCIES

In the normal course of business, we extend credit on open
account to our customers. From time to time, we also invest in
joint ventures with a variety of business partners. Although
Delphi is affected by the financial well-being of the automotive
industry as a whole, we believe that the credit risk associated
with trade receivables and investments in our joint ventures is
mitigated by our customer base and ongoing control procedures to
monitor the credit worthiness of customers and business partners.
 As of September 30, 1999, one customer /business partner
was experiencing financial difficulties. Delphis balance
sheet as of September 30, 1999 includes accounts receivable
of $27 million and investments in joint ventures relating to
 this customer /business partner, the value of which may be
impacted by the future performance of this customer /business
partner.

Delphi is from time to time subject to various legal actions and
claims incidental to our business, including those arising out of
 alleged defects, breach of contracts, violation of product
warranties, employment-related matters, environmental matters,
patent infringements and other intellectual property disputes.
Litigation is subject to many uncertainties, and the outcome of
individual litigated matters is not predictable with assurance.
After discussions with counsel, it is the opinion of management
that the outcome of such matters will not have a material adverse
 impact on our consolidated financial position, results of
operations or cash flows.



|    |                          
|--- | -------------------------
|10. | TENTATIVE LABOR AGREEMENT

During September 1999 Delphi and the United Auto Workers
reached a tentative labor agreement. The agreement, which should
be effective as of October 18, 1999, provides for enhanced
benefits and certain other changes. Results of ratification votes
 are pending.

13



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##### Table of Contents








ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL


CONDITION AND RESULTS OF OPERATIONS


Overview

Delphi experienced another exciting quarter as we continued to
realize our goals and build on the successes of the first half of
 1999. In the third quarter we made significant progress toward
achieving our goal of improved labor relations in reaching a
tentative agreement with the UAW, our first as an independent
company. We also posted strong operating results and generated
strong cash flows in the third quarter. This strong cash flow
allowed us to make an additional voluntary contribution of
$300 million to the Delphi hourly pension plan, continue to
pursue growth initiatives and meet our dividend commitments. In
addition, our customers continued to recognize our innovative
products and technologies, as evidenced by new contract awards
from customers such as DaimlerChrysler, Peugeot Citröen and
Volkswagen.

Results of Operations

The following managements discussion and analysis of
financial condition and results of operations (MD&A) should
be read in conjunction with the MD &A included in our
Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 and the 1998 pro forma financial
information included in Note 2 to our September 30,
1999 financial statements.

Three Months Ended
September 30, 1999 versus Three Months Ended September 30,
1998

Net Sales.Consolidated net sales and changes in net sales
 by product sector for the three months ended September 30,
1999 and 1998 were:

|                                          |                        |                       |       |       |  |        |       |       |  |   |     |     | 
|----------------------------------------- | ---------------------- | --------------------- | ----- | ----- |  | ------ | ----- | ----- |  | - | --- | --- | 
|                                          |                        |                       |       |      
|                                          |                        | Three Months Ended    |       |      
|                                          |                        | September 30          |       |      
|                                          |                        |                       |       |      
|Product Sector                            |                        | 1999                  |       | 1998  |  | Change
|                                          |                        |                       |       |       |  |       
|                                          |                        |                      
|                                          |                        | (dollars in millions)
|                                         
|                                         
|                                         
|                                         
|Electronics & Mobile Communication        |                        | $                     | 1,225 |       |  | $      | 995   |       |  | $ | 230 |    
|                                         
|                                         
|                                         
|                                         
|Safety, Thermal & Electrical Architecture |                        |                       | 2,445 |       |  |        | 2,369 |       |  |   | 76  |    
|                                         
|                                         
|                                         
|                                         
|Dynamics & Propulsion                     |                        |                       | 3,267 |       |  |        | 2,752 |       |  |   | 515 |    
|                                         
|                                         
|                                         
|                                         
|Eliminations                              |                        |                       | (147  | )     |  |        | (101  | )     |  |   | (46 | )  
|                                          |                        |                       |       |       |  |        |       |       |  |   |     |    
|                                          | Consolidated net sales |                       | $     | 6,790 |  |        | $     | 6,015 |  |   | $   | 775 | 
|                                          |                        |                       |       |       |  |        |       |       |  |   |     |    

Net sales for the third quarter of 1999 increased
$775 million over the comparable period of 1998. Our
increased net sales reflect continued growth in revenue from
ongoing operations, strong North American sales volume and the
impact of work stoppages at certain GM and Delphi locations
during the third quarter of 1998. Increases in net sales compared
 to 1998 occurred despite the impact of $246 million of
sales by businesses divested in late 1998 and more than offset
continued price pressure that resulted in price reductions
totaling $109 million for the 1999 third quarter. After
adjusting to eliminate the 1998 sales of divested businesses
(primarily seating, lighting and coil spring businesses
previously included in our Safety, Thermal and Electrical
Architecture product sector), our consolidated net sales for the
third quarter of 1999 increased 17.7% over the comparable period
of 1998.

Non-GM sales for the third quarter of 1999 increased 16.2% on a
comparable basis over the third quarter of 1998. This increase
represents a strong contribution to our goal of an annual
increase in non-GM sales of 10%.

14



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##### Table of Contents



Operating Income.Operating income was $206 million
for the third quarter of 1999 compared to an operating loss of
$729 million for the third quarter of 1998. During the third
 quarter of 1998, we recorded a loss of $430 million, or
$271 million after-tax, related to divestitures involving
our seating, lighting, and coil spring businesses. The charge had
 the effect of increasing cost of sales and depreciation and
amortization by $382 million and $48 million,
respectively. In addition, our reported operating loss for 1998
does not reflect the reductions in employee benefit costs and
higher other costs as a result of our separation agreement with
GM (the Separation Agreement). After giving effect to
 the terms of the Separation Agreement (see Note 2 to our
financial statements), and excluding the loss on divested
businesses, our operating income (loss) by product sector for the
 three months ended September 30, 1999 and 1998 was:

|                                          |                        |                       |     |           |  |        |      |      |   |   |     |     | 
|----------------------------------------- | ---------------------- | --------------------- | --- | --------- |  | ------ | ---- | ---- | - | - | --- | --- | 
|                                          |                        |                       |     |          
|                                          |                        | Three Months Ended    |     |          
|                                          |                        | September 30          |     |          
|                                          |                        |                       |     |          
|                                          |                        |                       |     | Pro Forma |  |       
|Product Sector                            |                        | 1999                  |     | 1998*     |  | Change
|                                          |                        |                       |     |           |  |       
|                                          |                        |                      
|                                          |                        | (dollars in millions)
|                                         
|                                         
|                                         
|                                         
|Electronics & Mobile Communication        |                        | $                     | 110 |           |  | $      | (13  | )    |   | $ | 123 |    
|                                         
|                                         
|                                         
|                                         
|Safety, Thermal & Electrical Architecture |                        |                       | 62  |           |  |        | 19   |      |   |   | 43  |    
|                                         
|                                         
|                                         
|                                         
|Dynamics & Propulsion                     |                        |                       | 46  |           |  |        | (187 | )    |   |   | 233 |    
|                                         
|                                         
|                                         
|                                         
|Other                                     |                        |                       | (12 | )         |  |        | (91  | )    |   |   | 79  |    
|                                          |                        |                       |     |           |  |        |      |      |   |   |     |    
|                                          | Total operating income |                       | $   | 206       |  |        | $    | (272 | ) |   | $   | 478 | 
|                                          |                        |                       |     |           |  |        |      |      |   |   |     |    

The strong improvement in third quarter 1999 operating income
reflects increased volumes due to a strong North American market
and the impact of work stoppages at certain GM and Delphi
locations during the third quarter of 1998. The improvement also
reflects the results of our continuing cost reduction efforts and
 lean manufacturing initiatives that are being implemented in
response to industry pricing pressures. Our gross margin was
11.9% for the three months ended September 30, 1999 compared
 to an adjusted pro forma gross margin of 5.1% for the comparable
 period of 1998. Selling, general and administrative expenses
during the third quarter of 1999 increased compared to pro forma
1998 amounts due to incremental costs required as a result of our
 efforts to pursue non-GM customers and expand our global
operations. The increase also reflects Delphis efforts to
control spending during the period of work stoppage in 1998.
Depreciation and amortization expense in the third quarter of
1999 of $202 million was consistent with the third quarter
1998 expense of $200 million, excluding the impact of the
sale of divested businesses.

Net Income.Net income totaled $136 million for the
third quarter of 1999 compared to a historical net loss of
$500 million for the third quarter of 1998. For comparative
purposes, after giving effect to the terms of the Separation
Agreement, and excluding the $271 million loss on divested
businesses, our pro forma net loss for the three months ended
September 30, 1998 would have been $214 million.
Interest expense decreased by $34 million due to lower 1999
average outstanding debt balances. Our lower debt balances
reflect the impact of strong cash flows during 1999. Our
effective income tax rate of 38% for the third quarter of 1999
was the same as our pro forma effective rate during the
comparable period of 1998.

Earnings per share. Earnings (loss) per share
calculations are complicated by the changes in shares outstanding
 related to the steps involved in our separation from GM.
Currently, we have approximately 561 million shares
outstanding, consisting of the 100 million shares issued in
our initial public offering in February 1999 and
465 million shares previously owned by GM, net of
approximately 4 million treasury shares acquired during the
third quarter. In connection with the distribution of
Delphis remaining shares owned by GM (the
Spin-Off) on May 28, 1999, stock options held by
 Delphi employees on shares of GM common stock were converted to
equivalent stock options on Delphi common stock. Under generally
accepted accounting principles, the shares issued in our IPO and
dilution associated with the converted options are excluded from
the 1998 calculation of earnings per share and only included in
the 1999 calculation for the period of time outstanding. This
results in diluted earnings (loss) per share of $0.24 and $(1.08)
 for the three months ended September 30, 1999 and 1998,
respectively.



---

|  |                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------
|* | Adjusted to exclude the $430 million pre-tax loss related to
	 the sale of our seating, lighting and coil spring businesses.

15



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##### Table of Contents



Because of the change in outstanding shares since 1998 resulting
from the IPO, we believe that the pro forma number of shares
outstanding as of September 30, 1998, 565 million, will
 be widely used in computing our 1998 earnings per share for
comparative purposes. On this comparable basis, after giving
effect to the terms of the Separation Agreement and excluding the
 loss on sale of divested businesses, our loss per share would be
 $(0.38) for the three months ended September 30, 1998. See
Note 2 to our consolidated financial statements for additional
information.

Nine Months Ended September 30, 1999 versus Nine
Months Ended September 30, 1998

Net Sales.Consolidated net sales and changes in net sales
 by product sector for the nine months ended September 30,
1999 and 1998 were:

|                                          |                        |                       |        |        |  |        |       |        |  |   |       |       | 
|----------------------------------------- | ---------------------- | --------------------- | ------ | ------ |  | ------ | ----- | ------ |  | - | ----- | ----- | 
|                                          |                        |                       |        |       
|                                          |                        | Nine Months Ended     |        |       
|                                          |                        | September 30          |        |       
|                                          |                        |                       |        |       
|Product Sector                            |                        | 1999                  |        | 1998   |  | Change
|                                          |                        |                       |        |        |  |       
|                                          |                        |                      
|                                          |                        | (dollars in millions)
|                                         
|                                         
|                                         
|                                         
|Electronics & Mobile Communication        |                        | $                     | 3,974  |        |  | $      | 3,412 |        |  | $ | 562   |      
|                                         
|                                         
|                                         
|                                         
|Safety, Thermal & Electrical Architecture |                        |                       | 7,925  |        |  |        | 8,366 |        |  |   | (441  | )    
|                                         
|                                         
|                                         
|                                         
|Dynamics & Propulsion                     |                        |                       | 10,471 |        |  |        | 9,222 |        |  |   | 1,249 |      
|                                         
|                                         
|                                         
|                                         
|Eliminations                              |                        |                       | (428   | )      |  |        | (321  | )      |  |   | (107  | )    
|                                          |                        |                       |        |        |  |        |       |        |  |   |       |      
|                                          | Consolidated net sales |                       | $      | 21,942 |  |        | $     | 20,679 |  |   | $     | 1,263 | 
|                                          |                        |                       |        |        |  |        |       |        |  |   |       |      

Net sales for the first nine months of 1999 increased
$1.3 billion over the comparable period of 1998. Our
increased net sales reflect strong North American sales volume
and the impact of work stoppages at certain GM and Delphi
locations during the second and third quarters of 1998. Increases
 in net sales compared to 1998 occurred despite the impact of
$1.2 billion of sales by businesses divested during 1998 and
 more than offset continued price pressure that resulted in price
 reductions totaling $338 million for the first nine months
of 1999. After adjusting to eliminate the 1998 sales of divested
businesses (primarily seating, lighting and coil spring
businesses previously included in our Safety, Thermal and
Electrical Architecture product sector), our 1999 year to
date net sales increased 12.7% over the comparable period of
1998. Non-GM sales for the first nine months of 1999 increased
13.1% on a comparable basis over the first nine months of 1998.
This increase indicates that we are on-track to achieve our goal
of an annual increase in non-GM sales of 10%.

Operating Income.Operating income was $1.3 billion
for the nine months of 1999 compared to an operating loss of
$284 million for the nine months of 1998. After giving
effect to the terms of the Separation Agreement (see Note 2 to
our financial statements), and excluding the $430 million
loss on divested businesses, our operating income (loss) by
product sector for the nine months ended September 30, 1999
and 1998 was:

|                                          |                        |                       |     |           |  |        |      |     |  |   |     |       | 
|----------------------------------------- | ---------------------- | --------------------- | --- | --------- |  | ------ | ---- | --- |  | - | --- | ----- | 
|                                          |                        |                       |     |          
|                                          |                        | Nine Months Ended     |     |          
|                                          |                        | September 30          |     |          
|                                          |                        |                       |     |          
|                                          |                        |                       |     | Pro Forma |  |       
|Product Sector                            |                        | 1999                  |     | 1998*     |  | Change
|                                          |                        |                       |     |           |  |       
|                                          |                        |                      
|                                          |                        | (dollars in millions)
|                                         
|                                         
|                                         
|                                         
|Electronics & Mobile Communication        |                        | $                     | 448 |           |  | $      | 160  |     |  | $ | 288 |      
|                                         
|                                         
|                                         
|                                         
|Safety, Thermal & Electrical Architecture |                        |                       | 526 |           |  |        | 321  |     |  |   | 205 |      
|                                         
|                                         
|                                         
|                                         
|Dynamics & Propulsion                     |                        |                       | 392 |           |  |        | (28  | )   |  |   | 420 |      
|                                         
|                                         
|                                         
|                                         
|Other                                     |                        |                       | (74 | )         |  |        | (224 | )   |  |   | 150 |      
|                                          |                        |                       |     |           |  |        |      |     |  |   |     |      
|                                          | Total operating income |                       | $   | 1,292     |  |        | $    | 229 |  |   | $   | 1,063 | 
|                                          |                        |                       |     |           |  |        |      |     |  |   |     |      

Operating income for the first nine months of 1999 increased
$1.1 billion over the pro forma comparable period of 1998
reflecting strong volume growth, partially due to work stoppages
that impacted the second and third quarters of 1998, and the
results of our continuing cost reduction efforts and lean
manufacturing initiatives that are being implemented in response
to industry pricing pressures. Our gross margin was 14.2% for the
 nine months of 1999 compared to an adjusted pro forma gross
margin of 9.8% for the comparable period of 1998. Gross margin
improvements were partially offset by increased selling, general
and administrative expenses due to incremental costs required as
a result of our efforts to pursue business with non-GM customers
and expand our global operations. Depreciation and amortization
expense for 1999 improved over



---

|  |                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------
|* | Adjusted to exclude the $430 million pre-tax loss related to
	 the sale of our seating, lighting and coil spring businesses.

16



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##### Table of Contents



1998 reflecting reductions in expense due to the asset impairment
 charge recognized in 1998, businesses divested during 1998 and
the timing of various capital projects.

Net Income.Net income for the nine months of 1999 was
$814 million compared to a historical net loss of
$181 million for the nine months of 1998. For comparative
purposes, after giving effect to the terms of the Separation
Agreement, and excluding the $271 million loss on divested
businesses, our adjusted pro forma net income for the nine months
 of 1998 was $141 million. Interest expense decreased by
$105 million as strong 1999 cash flows reduced our average
outstanding debt balances. Our effective income tax rate, after
giving effect to the terms of the Separation Agreement and
adjusting to exclude the loss on sale of divested businesses in
1998, increased from 8.4% during the first nine months of 1998 to
 38.0% for the comparable period of 1999. The increased effective
 income tax rate primarily reflects changes in the tax
environment resulting from our separation from GM.

Earnings per share.Diluted earnings per share for the
nine months ended September 30, 1999 were $1.48 compared to
a historical diluted loss per share of $(0.39) for the nine
months ended September 30, 1998. For comparative purposes,
assuming the 100 million shares issued in our IPO were
outstanding since January 1, 1998 and after giving effect to
 the terms of the Separation Agreement and excluding the loss on
sale of divested businesses, our earnings per share would have
been $0.25 for the first nine months of 1998.

Liquidity and Capital Resources

Liquidity

Our net liquidity, measured as cash and marketable securities
less total debt, was $(508) million at September 30, 1999
compared to $(2.5) billion at December 31, 1998. The ratio
of our total debt to total capital, which consists of total debt
plus stockholders equity, was 32% at September 30,
1999 and 100% at December 31, 1998. If our Separation from
GM and the IPO had occurred on December 31, 1998, our pro
forma net liquidity and ratio of total debt to total capital
would have been $(1.4) billion and 52% at December 31, 1998,
 respectively. The improvements in our net liquidity and ratio of
 total debt to total capital, after adjusting for the impact of
the Separation Agreement and our initial public offering,
resulted from strong cash flows generated during the first nine
months of 1999. See Liquidity and Capital
ResourcesCash Flows. We expect that our improved net
liquidity position will allow for continuing pursuit of our
objectives for pension funding, while preserving flexibility for
strategic growth initiatives and other activities designed to
enhance shareholder value.

Extension of Payment Terms

In accordance with the Separation Agreement, effective
January 1, 1999, payment terms for our accounts receivable
from GM were modified such that payments are generally due to us
on the second day of the second month following the date of
shipment. These modified payment terms are consistent with those
GM is currently in the process of introducing to all of its
suppliers. Previous payment terms generally required GM to make
accounts receivable payments in the month following shipment by
Delphi. When the change in payment terms was implemented, our
accounts receivable increased by approximately $2.1 billion.
 In response to the change in accounts receivable payment terms
as a result of the Separation Agreement, we have successfully
extended payment terms with many of our suppliers. We expect to
continue to negotiate these extended terms with our suppliers
over time.

Debt Capitalization and
Available Financing Sources

Immediately prior to the transactions contemplated by the
Separation Agreement, approximately $1.6 billion of certain
intracompany accounts receivable from GM were offset with a
$3.1 billion outstanding intracompany note payable to GM
with the difference resulting in an increase in GMs net
investment in Delphi.

In January 1999, we entered into two financing arrangements
with a syndicate of lenders providing for an aggregate of
$4.9 billion in available revolving credit facilities. In
general, the facilities provided up to $4.9 billion of available
credit to be used for general corporate purposes through
January 3, 2000, after which $1.5 billion would be
available through January 3, 2004. On May 4, 1999, we
completed a public offering of unsecured term debt securities
totaling $1.5 billion in equal five year, ten year and
thirty year tranches. The proceeds were used to refinance amounts
 previously outstanding under the long-term portion of our
revolving credit facilities. Subsequent to the unsecured debt
issuance, the $4.9 billion previously available under our
revolving credit facilities was reduced to $3.0 billion in
available funds, generally split between 364-day and five year
tranches. See Note 4 to our consolidated financial
statements for additional information. In

17



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##### Table of Contents



May 1999, we entered into a commercial paper program
providing up to $1.0 billion of available borrowings, which
was increased to $1.5 billion of availability in
July 1999. As of September 30, 1999, we had no amounts
outstanding under our revolving credit facilities or commercial
paper program.

Cash Flows

Operating Activities.Net cash used in operating
activities was $1.9 billion and $51 million for the
nine months ended September 30, 1999 and 1998, respectively.
 The use of cash during 1999 reflects the impact of the
settlement of certain accounts receivable with GM and the change
in accounts receivable payment terms in accordance with the terms
 of the Separation Agreement. Net cash provided by operating
activities for the first nine months of 1999, excluding the
impact of the settlement of accounts receivable and change in
payment terms, would have been $1.8 billion. Cash generated
during the first nine months of 1999 reflects our strong
earnings, reductions in inventory levels resulting from our lean
manufacturing initiatives and the timing of payments for accounts
 payable and certain accrued expenses. These favorable cash flows
 were partially offset by $900 million in voluntary pension
contributions made in the second and third quarters of 1999.

Investing Activities.Cash flows used in investing
activities totaled $757 million and $699 million for
the nine months ended September 30, 1999 and 1998,
respectively. Cash used in investing activities primarily relates
 to our capital expenditure program. The decrease in cash used in
 investing activities primarily reflects differences in the
timing of project spending for new product programs. We expect
total capital expenditures for 1999 to be lower than our 1998
capital expenditures of $1.4 billion.

Financing Activities.Net cash provided by financing
activities was $2.9 billion and $741 million for the
nine months ended September 30, 1999 and 1998, respectively.
 Cash provided by financing activities for the nine months of
1999 include the proceeds from our initial public offering in
February 1999 and the proceeds from our public offering of
unsecured term debt securities in May 1999. The proceeds from our
 initial public offering were used for general corporate
purposes, including working capital requirements which were
initially impacted by the change in General Motors accounts
receivable payment terms described above. The proceeds from our
debt offering were used to refinance amounts previously borrowed
under our revolving credit facilities. During the third quarter
of 1999, we acquired approximately 4 million shares of
Delphi common stock in the open market to be reissued under stock
 option and other employee benefit plans. Cash used to acquire
treasury shares during 1999 totaled $67 million.

Dividends. On September 8, 1999, the Delphi Board
declared a quarterly dividend on Delphi common stock of $0.07 per
 share, payable on October 18, 1999. The dividend declared
on June 9, 1999 was paid on July 20, 1999.

Our Other Postretirement Employee Benefits and Pension
Obligations

Until May 28, 1999, Delphis U.S. hourly employees
continued to participate in the defined benefit pension plan and
other postretirement plans administered by GM. Effective
May 28, 1999, pension and other postretirement obligations
under the GM plans relating to Delphis U.S. active and
inactive employees were assumed by Delphi plans subject to the
provisions described below. The Delphi plans were established and
 are being administered under the same terms that existed under
the GM plans. GMs pension plan assets were divided between
the pension trusts for qualified plans of Delphi and GM so that
each plans trust received the legally required amount to
meet applicable benefit and tax regulations.

As part of our capital planning process, we may make voluntary
contributions to our pension plans in excess of federal
regulatory minimum requirements to improve the funded status of
our pension plans. In this regard, we made a $300 million
voluntary cash contribution to the Delphi hourly pension plan on
September 30, 1999, bringing our total voluntary cash
contributions to $900 million year-to-date. Our intent
continues to be to fully fund our current hourly pension benefits
 over the next few years on an economic basis.

Under the terms of the Separation Agreement, Delphi U.S. hourly
employees who retire on or before October 1, 1999 are
treated as GM employees for purposes of pension and other
postretirement benefit obligations. The initial allocation of
pension and other postretirement benefit obligations between
Delphi and GM assumed certain levels of U.S. hourly retirements
on or before October 1, 1999. Delphi will record a fourth
quarter 1999 adjustment of GMs initial investment in Delphi
 to reflect the impact of changes in pension and other
postretirement benefit obligations resulting from differences
between the actual number of retirements and the estimate used in
 generating the initial allocation. Retirements above the
estimate used in generating the initial allocation of pension and
 other postretirement benefits could also result in cash

18



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##### Table of Contents





Year 2000

As of the end of the third quarter of 1999, our efforts to
minimize the risk of disruption from the Year 2000 issue are near
 completion. Our overall plan to address the Year 2000 problem is
 described more fully in our 1998 Annual Report on
Form 10-K; the following is an update of the information
included therein. As a result of the implementation of new
enterprise software during the previous quarter, we were able to
complete the readiness testing of our critical systems. Delphi
Year 2000 teams around the world have successfully completed the
inventory, assessment and remediation of those systems and
components affected by the Year 2000 issue. Currently, we are
focusing on contingency planning, change management, transition
planning and command center activities.

We continue our contingency planning efforts, which focus on
minimizing the scope and duration of disruptions by having
sufficient personnel and other resources in place to permit a
flexible, real-time response to specific problems should they
arise.

Our change management program seeks to minimize exposure to risk
by avoiding the unnecessary modification or addition of new
hardware and software. A freeze is in place for the remainder of
the year, whereby existing systems cannot be modified and new
systems cannot be added unless it is absolutely required or in
support of a customer requirement.

The transition planning process determines the activities to be
carried out prior to, during and after the Year 2000
transition period to ensure smooth restoration of the operations
that are essential to the day-to-day functioning of the operating
 units. It includes steps such as data backup and controlled shut
 down and start up of critical equipment. The ultimate goal of
transition planning is to facilitate a smooth start up of
operations during the transition period, specifically
December 1999 and January 2000.

Command centers around the world are being established to
actively monitor and manage the Year 2000 transition,
provide regular and timely status reports and respond to
inquiries. Staffed by business and IT experts during the
transition period, the command centers will coordinate preventive
 measures and solutions across Delphi, solve common problems and
provide a focal point for Year 2000 communications.

Additionally, over 8,000 suppliers to Delphi and its subsidiaries
 have been assessed and are being Year 2000 certified
through one of the industrys most comprehensive supplier
chain readiness programs. In addition to monitoring our own
efforts, Delphi is monitoring utility providers and government
agencies in over 35 countries to determine their state of
Year 2000 readiness, as it could affect our Year 2000
efforts. To the extent possible, Delphi has developed contingency
 plans to address the lack of Year 2000 readiness on the
part of suppliers and outside organizations.

The cost of our Year 2000 program is being expensed as
incurred with the exception of capitalizable replacement hardware
 and computer software costs developed for internal use. Total
incremental spending by Delphi is not expected to be material to
our companys operations, liquidity or capital resources. We
 incurred approximately $7 million of Year 2000
expenses during the third quarter of 1999. Delphi currently
expects its total Year 2000 spending to be approximately
$101 million, which has been and will continue to be funded
from operations.

We do not anticipate a significant disruption of our business as
a result of the Year 2000 issue. However, there is still
uncertainty about the broader scope of the Year 2000 issue
as it may affect Delphi and third parties, including our
customers, that are critical to Delphis operations. If we
are unable to implement adequate contingency plans in the event
that problems are encountered, there could be a material adverse
effect on our business, results of operations or financial
condition.

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Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 (the
Act) provides a safe harbor for forward-looking
statements made by us or on our behalf. Delphi and its
representatives may periodically make written or oral statements
that are forward-looking, including statements
included in this report and other filings with the Securities and
 Exchange Commission and in reports to our stockholders. All
statements which address operating performance, events or
developments that we expect or anticipate may occur in the
future, including statements relating to volume growth, awarded
sales contracts and earnings per share growth or statements
expressing general optimism about future operating results, are
forward-looking statements. These statements are made on the
basis of managements views and assumptions; as a result,
there can be no assurance that managements expectations
will necessarily come to pass. A list of factors which could
impact future events and performance is included in the Delphi
Automotive Systems Corporation 1998 Annual Report on
Form 10-K filed with the Securities and Exchange Commission.

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PART II. OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

We are involved in routine litigation incidental to the conduct
of our business. We do not believe that any of the litigation to
which we are currently a party will have a material adverse
effect on our business or financial condition.

ITEM 5.  OTHER INFORMATION

Stockholders proposals intended to be presented at the 2000
 Annual Meeting of Stockholders must be received between the
close of business on November 2, 1999 and the close of
business on December 2, 1999, for inclusion in the
Companys proxy statement and form of proxy for that
meeting. Any such proposal should be mailed to the attention of
the Corporate Secretary.

BankBoston EquiServe, Delphis transfer agent, has
established a Stock Purchase and Dividend Reinvestment Program
for Delphi common stock. For further information, contact
BankBoston EquiServe at (800) 818-6599 (outside of the U.S.
call 781-575-3990).

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

|        |     |              |  |                                                                                                                                                                                                                                                                                                                                                                     |  |  |     | 
|------- | --- | ------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | --- | 
|Exhibit |     |              |  |                                                                                                                                                                                                                                                                                                                                                                    
|Number  |     | Exhibit Name |  | Page No.                                                                                                                                                                                                                                                                                                                                                           
|        |     |              |  |                                                                                                                                                                                                                                                                                                                                                                    
|        | 4.1 |              |  | Instruments defining the rights of holders of debt of the
	registrant have been omitted from this exhibit index because the
	amount of debt authorized under any such instrument does not
	exceed 10% of the total assets of the registrant and its
	subsidiaries. The registrant agrees to furnish a copy of any such
	 instrument to the Commission upon request. |  |  |     | 
|       
|       
|       
|       
|        | 27  |              |  | Financial data schedule (for SEC information only)                                                                                                                                                                                                                                                                                                                  |  |  | n/a | 
|       
|       
|       
|       
|        | 99  |              |  | Press release dated October 13, 1999 regarding quarterly
	earnings (filed but not included herein)                                                                                                                                                                                                                                                                  |  |  | n/a | 

(b)  REPORTS ON FORM 8-K

None

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SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.



| |                                      
| | -------------------------------------
| | DELPHI AUTOMOTIVE SYSTEMS CORPORATION
| |                                      

| |             
| | ------------
| | (Registrant)

|                 |  |  |  |                                                                        |  | 
|---------------- |  |  |  | ---------------------------------------------------------------------- |  | 
|October 13, 1999 |  |  |  | /s/ PAUL R. FREEPaul R. Free, Chief Accounting
	Officer and Controller |  | 

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EXHIBIT INDEX

|        |     |              |  |                                                                                                                                                                                                                                                                                                                                                                    
|------- | --- | ------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |     |             
|Number  |     | Exhibit Name
|        |     |             
|        | 4.1 |              |  | Instruments defining the rights of holders of debt of the
	registrant have been omitted from this exhibit index because the
	amount of debt authorized under any such instrument does not
	exceed 10% of the total assets of the registrant and its
	subsidiaries. The registrant agrees to furnish a copy of any such
	 instrument to the Commission upon request.
|       
|       
|       
|       
|        | 27  |              |  | Financial data schedule (for SEC information only)                                                                                                                                                                                                                                                                                                                 
|       
|       
|       
|       
|        | 99  |              |  | Press release dated October 13, 1999 regarding quarterly
	earnings (filed but not included herein)                                                                                                                                                                                                                                                                 

23